Client Alert – The Impact of Government Regulation No. 35 of 2021 to Employment Relations: A Fair Employment Rule?

On 2 February 2021, the Government of the Republic of Indonesia issued Government Regulation No. 35 of 2021 on Fixed-Term Employment Agreement, Outsourcing, Working Time and Rest Time, and Termination of Employment (GR 35/2021). GR 35/2021 is one of the longest-awaited regulations mandated under Law Number 11 of 2020 on Job Creation (Job Creation Law) as Job Creation Law has many outstanding matters on employment matters that need to be detailed further and clarified under implementing regulations.

GR 35/2021 includes the following provisions (i) specific requirements for Fixed-Term Employment Agreement (Perjanjian Kerja Waktu Tertentu/PKWT), (ii) compensation for PKWT workers, (iii) protection of workers and the business licensing for the outsourcing company, (iv) provisions on working time, overtime, and rest time for workers, (v) procedures for termination of employment, and (vi) severance pay, long service pay, and compensation rights. It is expected that this regulation will encourage new job opportunities in Indonesia while also bring more protections for the workers.

Our overview of GR 35/2021 can be accessed here: Client Alert – Government Regulation Number 35 of 2021

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